Young Kalshi users have traded an estimated $3.9B on sports and parlay-type contracts this year, exposing a loophole that lets them bet before age 21

Kalshi users as young as 18 are now responsible for billions of dollars worth of trading activity on sports that critics say amounts to a loophole in gambling laws.

A recent analysis by CNN showed so far this year users between the ages of 18 and 21 traded an estimated $5.4 billion on Kalshi, the largest prediction market in the U.S.

Of that amount, $3.9 billion was in sports-related events.

Sports gambling in most states is off limits for anyone under 21.

And yet Kalshi allows anyone 18 years old and older to put money into it because it is regulated as a financial market under the jurisdiction of the Commodity Futures Trading Commission.

This differs from sports gambling organizations, which are regulated at the state level.

In fact, New York State is suing to shut down Kalshi , alleging it’s operating an unlicensed gambling platform.

Kalshi did not immediately respond to a request for comment.

A spokesperson for Kalshi told CNN that users between the ages of 18 and 21 make up just 3.14% of its overall trading volume.

On Kalshi, users can buy an event contract with a yes or no outcome based on a real world event.

Kalshi’s exchange will then match the user to another user taking the opposite position, and would pay only the person who chose the correct outcome.

For sports, this means contracts can be made on anything from whether a certain team will win a game or whether a team will make it to the championship.

Kalshi also includes predictions on other events outside of sports such as midterm election results or whether 2026 will be the hottest year ever.

Kalshi has previously denied that its prediction markets constitute gambling, because users taking a position with an event contract are always countered by another user, not the platform itself, as would be the case with a sportsbook.